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Air India unfazed by ATA lawsuit

Officials of Air India say the debt-laded state-owned airline is unperturbed by a lawsuit opposing $3.4 bn extended by the US Exim Bank.

, ET Bureau|
Last Updated: Dec 02, 2011, 11.15 AM IST|Original: Nov 19, 2011, 04.48 AM IST
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NEW DELHI: Officials of Air India say the debt-laded state-owned airline is unperturbed by a lawsuit opposing $3.4 bn extended by the US Exim Bank to buy the B-787, better known as the Dreamliner, as the loans are backed by a guarantee from the government.

The Air Transport Association of Amercia's or ATA had charged US Exim of providing loans "without considering whether Air India is able to offer assurances of repayment."But a top Air India official said the premise of the lawsuit was flawed because of the sovereign guarantee.

The airline has also said that it has never defaulted on any of its US Exim loans till date. Of the total loans guaranteed by US Exim, a sum of $ 593 million has been repaid till date from 2007 onwards, it said in an emailed response.

Air India's CMD Rohit Nandan said that alternatives to the US Exim Bank's loan were also available. "Though it is too premature to comment, we always have the option to sell and lease back the B-787 aircraft as and when they arrive," Nandan told ET. He was referring to a practice known 'sale and lease back' in which an airline first buys aircraft, sells it to a leasing company and then takes the planes back on lease.

The ATA also alleged that guarantee for the Dreamliners, will "cause that foreign carrier to add at least one daily round trip flight between India and the US."

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